Question
The Fowler Martial Arts Academy trains young boys and girls in self-defence. Joan Fowler, the owner of the academy, notes that monthly revenue is higher
The Fowler Martial Arts Academy trains young boys and girls in self-defence. Joan Fowler, the owner of the academy, notes that monthly revenue is higher when school is in session but quite low when school is out (because many children are away on vacation or at summer camp). She has researched revenues for the past four years and obtained the information shown in the Table below. Answer the following questions based on the data provided in the table.
| Month | Year 1 | Year 2 | Year 3 | Year 4 |
| January | $59,042.00 | $57,495.00 | $56,583.00 | $55,658.00 |
| February | $62,659.00 | $62,622.00 | $66,438.00 | $67,164.00 |
| March | $22,879.00 | $24,273.00 | $27,766.00 | $27,795.00 |
| April | $29,946.00 | $30,492.00 | $31,600.00 | $30,667.00 |
| May | $26,839.00 | $28,237.00 | $29,589.00 | $31,962.00 |
| June | $19,134.00 | $17,893.00 | $20,115.00 | $21,096.00 |
| July | $20,051.00 | $21,126.00 | $19,324.00 | $22,778.00 |
| August | $19,625.00 | $22,876.00 | $23,486.00 | $23,144.00 |
| September | $19,925.00 | $22,641.00 | $24,719.00 | $26,601.00 |
| October | $58,435.00 | $60,796.00 | $60,666.00 | $61,385.00 |
| November | $87,705.00 | $87,815.00 | $86,693.00 | $88,581.00 |
| December | $77,430.00 | $78,711.00 | $80,056.00 | $81,048.00 |
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Do the forecasts for January Year 5 change if you change the number of periods
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to be used for calculating the moving average? Enumerate the three different
forecasts for January Year 5.
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Plot both the actual revenue and the predicted revenue for all the three moving
average calculations (You will have four plots in total on one chart).
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Visually inspect the plots for all three of the moving average predictions (i.e.moving averages based on 3, 5, and 7 months). a. What are the advantages of using a small number of periods in the moving average calculations? What are the disadvantages? b. What are the advantages of using a large number of periods in the moving average calculations? What are the disadvantages?
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Which model is the best (the one based on a 3, 5, or 7 months moving average)?
Why? Show your calculations.
PART 2
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Do forecasts for January Year 5 change if you change the smoothing constant values in your calculations? Enumerate the three different forecasts for January Year 5.
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Plot both the actual revenue and the predicted revenues for all the three calculations (You will have four plots in total on one chart).
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Visually inspect the plots for all three predictions (i.e. predictions based on smoothing constant values of 0.3, 0.5, and 0.7).
(i) What are the advantages of using a small value for the smoothing constant? What are the disadvantages?
(ii) What are the advantages of using a large value for the smoothing constant? What are the disadvantages?
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Which model is the best (the one based on alpha 0.3, 0.5, or 0.7)? Why? Show your calculations.
5. Using the decomposition method, forecast revenues for each month of Year 5.
6. Using multiple regression analysis, forecast revenues for each month of Year 5
7. Compare the models, the best models from a and b, and the models based on regression analysis and the decomposition method and choose the best one. Which model is the best? Why? Show your calculations.
Please answer the questions in excel thanks, will definitely upvote your answer thanks! *PLEASE DO NOT COPY ANSWER FROM OTHER CHEGG ANSWERS*
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Comparative International Accounting
Authors: Christopher Nobes, Robert B Parker
12th Edition
0273763792, 978-0273763796
